When you face difficult financial issues, you might decide to turn to a professional for help. You can turn to debt consolidation companies for help or turn to credit counseling firms. You can also hire a bankruptcy attorney for help. If the bankruptcy attorney reviews your finances and recommends filing for Chapter 13, you might want to learn a few things about this branch before agreeing to it. Learning as much as you can before filing is always a wise move, and here are some of the primary things you might want to learn first.
Chapter 13 Has Income Requirements
The first thing to know is that you must meet the income requirements for Chapter 13 to use this branch to file. If you do not earn a lot, you can use Chapter 7 bankruptcy. If the lawyer recommends Chapter 13, though, it is likely that they already completed an income test and found that you meet the requirements. You need enough income to repay the debts you owe.
Chapter 13 Requires Repaying Your Debts
Repaying your debts is a requirement of a Chapter 13 case. You might not have to repay 100% of your debts, but you will likely repay most of them. Your lawyer can help you see how this works by assisting with a repayment plan. The repayment plan tells you how much you must pay the bankruptcy court each month. It also shows you where your payments will go.
Chapter 13 Does Not Require Surrendering Assets
One of the top things to know about Chapter 13 is it does not require surrendering your assets. Chapter 7 is the liquidation branch of bankruptcy, but Chapter 13 is the wage-earners plan. Through Chapter 13, you repay your debts instead of receiving forgiveness for them. As a result, you get to keep everything you own.
Chapter 13 Offers Perks Over Chapter 7
You can reap a few other key perks from using Chapter 13 instead of Chapter 7. One perk is you can keep your house if you are currently facing foreclosure. The bankruptcy court stops the foreclosure process after you file. Secondly, you can receive lien-stripping from a second loan you have on your house if you qualify, but there are other perks, too.
Chapter 13 bankruptcy offers a way to get a fresh start if you need one. If you would like to learn more about how this process works, you can schedule an appointment with a bankruptcy attorney in your area.
